Foreign investors sold off Asian equities in September as bond rout hits risk appetite
AAXJ•Foreign investors net sold $23.49 billion of Asian equities in September, reversing $4.72 billion in net purchases in August, as rising US Treasury yields and inflation concerns weighed on risk appetite. South Korea accounted for more than 70% of regional outflows.
1. Regional outflows
Foreign investors sold a net $23.49 billion of stocks across South Korea, Taiwan, India, Indonesia, Thailand, Vietnam and the Philippines in September, following roughly $4.72 billion in net purchases in August. South Korea accounted for more than 70% of the outflows after a powerful rally in AI-linked stocks.
2. Yields and market flows
The US 10-year Treasury yield rose 53.5 basis points in September and reached 5.3645%, its highest since April 2002, on Wednesday. Indian equities saw $3.75 billion in foreign outflows, while Taiwan, Thailand, Indonesia and the Philippines also recorded net selling; Vietnam had $6.68 million in inflows. South Korean and Indian stocks saw further outflows of $4.81 billion and $3.25 billion, respectively, so far this month. Hedge funds’ overweight position in Asian stocks narrowed to 13% relative to the MSCI All Country World Index by mid-September, from 20% in June.
